Married couples and registered civil partners should review their wills or risk missing out on the recent Isa tax break, Danny Cox, financial planner at Bristol-based Hargreaves Landsdown, has suggested.
Commenting on the announcement in the Autumn Budget, which allows Isas to be passed down to a bereaved spouse with the usual tax-free benefits, Mr Cox said: “Under the new system, the surviving spouse will be given an additional, one-off Isa allowance equal to the value of the deceased’s Isa holdings. This enables them to re-shelter assets which were in a spouse’s Isa into an Isa in their name.”
Mr Cox said that if wills were not reviewed, all liquid assets would pass to children or other beneficiaries, and the surviving spouse would miss out and might not have sufficient money.
He said: “This makes it important for couples to ensure their Isas are left to each other, and may require a redrafting of their wills.”
Stephen Oliver, director of Northamptonshire-based The Will Company, said: “It is a good point to make, to earmark Isas as a legacy, which will take some financial planning, based on this potential legislation.
“We will be telling advisers to do a re-review with their clients as it is an advantage that may not have been considered before. It is definitely an advantage continuing the Isa, as it can carry the tax advantage to the existing pot and the surviving spouse can also add to the pot.”